By Andrew WebbJournal Staff Writer
After several years of choppy economic waters, including plummeting revenue, last year was a turnaround year for Emcore and other members of New Mexico Technology Flying 40 an annual ranking of the state's largest and fastest growing tech employers.
Emcore had focused much of its attention on manufacturing fiber-optic cable, optical switches and other telecommunications infrastructure equipment. The company's revenues plummeted from $185 million in 2001 to $88 million in 2002 and to $60 million by 2003, said its president and CEO, Rueben Richards Jr.
But in 2004, he said, "we turned cash flow positive for the first time since the tech downturn."
Recovery in the telecom market, and an upswing in business in solar power devices for satellites another important industry sector for Emcore helped drive its revenues back up to $93 million last year.
Many of the companies in this year's Flying 40 are reporting higher revenues, more venture capital activity, increased headcounts and even acquisitions. And even though the national economy is still far from humming along, local officials and economists echo the good vibes.
"It's maybe one year too early to sing 'happy times are here again,' but it's probably OK to warm up the piano," said Sherman McCorkle, president of Technology Ventures Corp., which, along with the Albuquerque Journal, KPMG LLP and New Mexico Bank & Trust, sponsors the Flying 40 list.
"We had those really tough years in '01, '02 and '03. Those years caused a lot of these companies to go backwards," McCorkle said. "In '04 and '05, these companies were able to stop the retreat, stabilize and begin to gain ground, add sales and add employees."
For 2004, revenues were up 2 percent from 2003 to $739 million. That was a 62 percent increase from total Flying 40 revenue in 2001.
Employee headcounts among the Flying 40, which had plummeted almost 1,500 in 2002, stood at 3,651 this year, a 48 percent improvement from 2001 figures.
McCorkle credits improvements in the national economy for the gains. Many of the Flying 40 companies depend on commercial sales outside the state and outside the government-driven economy that has traditionally helped insulate New Mexico companies from the vagaries of the national market.
"These 40 companies are truly reflective of the national economy," he said.
Stuart Schoenmann, CEO of Albuquerque-based optics firm CVI Laser, called 2004 the company's "best year ever" despite the turmoil of a buyout and management overhaul.
"We were looking at 50 percent growth in the business spread among each of our geographic areas," Schoenmann said.
University of New Mexico economist Lee Reynis said that though manufacturing as a whole saw only meager job gains nationwide in 2004, those gains were in telecommunications, semiconductor and other high-tech businesses.
Future plans of companies like Tempur-Pedic and Eclipse Aviation in Albuquerque bode well for employment, "but there were also a number of firms that have been here for a while, startups here that are finally seeing opportunities and are able to put together some expansion plans," Reynis said. "I think the outlook looks pretty good for New Mexico."
She cited engineering firm Ktech, which aims to expand its work from supporting Sandia National Laboratories activities to the commercial sector. The firm recently purchased a California company, Poly-Flow, which makes spray cleaning equipment for semiconductor manufacturing. It aims to move Poly-Flow to a new facility here, where it will employ up to 100.
Reynis said New Mexico's manufacturing industries would be well-served to stick to high-tech business as simpler commodity manufacturing moves overseas.
"We have a science and technology edge," she said. "That's what we need to focus on."
According to university figures, New Mexico actually suffered slight losses in manufacturing in 2004. Some of that is because the closure of the Philips Semiconductor plant occurred so late in 2003 that its 450 jobs are booked in 2004, Reynis said.
Figures from the New Mexico Department of Labor indicate overall modest manufacturing gains for 2004 about 300 jobs following several years of losses totaling 6,000 jobs since December 2000.
Overall, New Mexico added 16,300 jobs in 2004, according to the department.

Creating the Flying 40
The New Mexico Technology Flying 40, now in its eighth year, was compiled by KPMG LLP from applications submitted last year by the companies.
The list is meant to recognize some of New Mexico's largest and fastest growing companies in the technology sector. Companies are ranked according to current revenues and percentage growth in revenues.
As there were last year, there are three categories: companies with revenues of more than $20 million, companies with revenues between $10 million and $20 million, and companies with revenues under $10 million.
Companies with revenues of more than $20 million are at the top of the list, with KPMG ranking them simply by the revenues recorded during fiscal year 2003.
For companies with revenues between $10 million and $20 million, the Flying 40's midsection, KPMG ranks them by percentage growth.
A new category, the Falcon Awards, was introduced last year to recognize technology companies demonstrating outstanding growth potential.
Companies were asked to submit applications for the Flying 40 by this year's sponsors: Technology Ventures Corp. and New Mexico Bank and Trust.
The companies will be recognized at a luncheon today at the Albuquerque Hilton.
The Albuquerque Journal is the media sponsor.

Top 10 By Revenue
1. SBS TECHNOLOGIES
SBS Technologies, founded in 1986, designs and manufactures open-architecture embedded computer systems. Its components are used in several applications, including communication networking, medical imaging, industrial automation and military systems. Its products include computer components and interconnections, avionics, telemetry and rugged system enclosures. Headquartered in Albuquerque, SBS employs 500 in New Mexico, Minnesota, Massachusetts, California, North Carolina, Canada, Germany and China.
2. APPLIED RESEARCH ASSOCIATES
Applied Research Associates is an employee-owned engineering and applied science company that does in-depth research, engineering and technical support work for government and commercial clients. Its general business areas include defense and civil technologies, software development, system engineering, manufacturing of specialty products, laboratory technologies, field testing and environmental testing. Founded in 1979, it employs 950.
3. EMCORE CORP.
Emcore Corp. makes compound semiconductor-based components for broadband and wireless communications, lighting and space-based solar energy systems used on satellites. Emcore acquired Albuquerque-based Micro Optical Devices, or MODE, in 1997. Though it is headquartered in New Jersey, much of its manufacturing is located in Albuquerque, where it plans to soon relocate work done at a California solar cell plant. Emcore was the first tenant of the Sandia Science and Technology Park near Sandia National Laboratories. Founded in 1985, Emcore employs 217.
4. KTECH CORP.
Ktech Corp., founded in 1971, is an employee-owned technical services and products company based in Albuquerque. It specializes in scientific, engineering and technical services; design integration and manufacturing of automated industrial equipment, gauges and sensors. Ktech also provides support for Sandia National Laboratories' renowned Pulsed Power Research Center. Ktech recently purchased Sylmar, Calif.-based semiconductor manufacturing equipment company Poly-Flow Engineering, which it will move to Albuquerque. The company employs 561.
5. ABBA TECHNOLOGIES INC.
Abba Technologies is an Albuquerque company that designs and implements high-performance computing and enterprise-level customer solutions. Its largest customers include Los Alamos and Sandia national laboratories, California DOE laboratories, New Mexico state agencies, PNM and the University of New Mexico. It recently helped install computer systems at Los Alamos employing so-called "blade" technology, which allows computer hard drives to be located in a central, secure room, away from the desktop. The company, founded in 1993, employs 35.
6. CVI LASER
CVI is an Albuquerque manufacturer of laser optical components, mounts and optomechanical assemblies, and provides rapid prototype delivery, high volume production and system integration for challenging optical requirements. The company supplies semiconductor processing, industrial material processing, aerospace, biotech and research industries. It has facilities in New Mexico, Japan, the British Isles and Korea. Founded in 1972 as a two-man company, the company now employs 184.
7. INTEGRITY NETWORKING SYSTEMS INC.
Headquartered in Tucson but with most of its work done in New Mexico, Integrity specializes in computer networks for offices and government agencies and Linux systems. Its clients include state agencies, several national laboratories and the University of New Mexico hospitals. It has offices in Albuquerque, Santa Fe, Española and Colorado Springs, Colo., and employs 43.
8. HOLMAN'S INC.
Holman's, which this year celebrated 50 years in business, sells and services high-end computers and peripherals, surveying equipment, maps, GPS technology and computer-aided drafting software. The company supplies architects, contractors, engineers, surveyors and the scientific community throughout the Southwest, and has offices in Albuquerque, as well as Tempe, Ariz., and Tucson. It employs 57.
9. NETWORK ARCHITECHS CORP.
Network Architechs is a networking company that designs, implements and maintains communications and computer networks for businesses, municipalities, universities, hospitals and banks. It specializes in combined computer and phone networks, reducing the amount of wiring in a building and allowing for advanced phone capabilities. It was recently purchased by Houston-based I-Sector Corp. subsidiary InterNetworks Corp., and its offices in Albuquerque and El Paso are now operated by the Texas company. Network Architechs employs 28.
10. LECTROSONICS INC.
Rio Rancho-based Lectrosonics makes high-end wireless microphone systems and digital signal processors for the audio, television and movie industries. Its products are designed in-house and sold worldwide through its dealer network and have been used on many sitcoms, talk shows and "reality" programs. The company has offices in New York, California and Tennessee. Founded in 1971, Lectrosonics employs 120.